Summary: Leveraging your digital prowess means providing great online service to start with.
This case study outlines how digital failings can lower trust and reputation.
How this affects your brand equity is discussed.
One of the first questions was whether to book my hotel using an online platform or directly on the hotel’s website?
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Of course I had heard about the duopoly of Expedia and Booking.com. They handle four out of five agency bookings in Europe. At 80 percent, that means that the third operator, HBS, has apparently lost a lot of ground recently. Other small competitors and start-ups, such as bookbedder, are offering property owners better terms.
But hotel owners do not necessarily like these platforms. For instance, you pay a 12 to 15 percent commission to Booking.com. However, regardless of customer evaluations, your property may still rank seventeenth on the list. If you increase Booking.com’s commission to 40 percent, you’re suddenly ranked first, as experienced by Thomas Küble, manager of Berne’s Ambassador and City hotels.
Brand equity seems to play some role in this game of chess. According to David A. Aaker brand equity is like a chest of drawers with the following:
1. Awareness of the brand, meaning our target audience knows about our brand – or not.
2. Associations with, and beliefs about the brand (e.g., associating the brand with sustainability).
3. Attitude towards the brand (i.e. positive, negative or no opinion).
The following NH Hotel Group reservation staff case neatly illustrates how digital prowess can influence a person’s belief about a brand. We also outline how someone’s attitude toward the brand changes in the process of making a hotel reservation.
1. Price match
The first thing a hotel would want to do is match the price on any of these platforms. In other words, you do not have to undercut them, but offering the same value for money is obvious. Let me explain.
For my stay during the Marketing Day in Leipzig, I looked at Booking.com and other platforms, including the hotel’s own e-commerce shop: NH Hotel Leipzig Messe.
When I checked the NH Hotel Group’s own reservation platform, I found the price as listed below. An additional €10 or more on top would be due for breakfast.
So I started searching the web to see if I could find something cheaper. I found several platforms that offered me a room in Leipzig for a similar or even lower price. Because I wanted to stay near the conference venue, the NH Hotel Leipzig Messe was ideal. What puzzled me a bit was that some platforms offered me a lower price for this hotel than its own website did.
Hence, I checked if the hotel would match any of those lower rates.
2. Make things easy for your client
The price guarantee below shows that for all practical purposes, advance bookings have to be paid in full and are non-refundable. Quite common in the industry (see also Accor Hotels). This rule is important for getting the refund, as I will explain a bit further below.
So I wanted to take NH Hotel Group up on its offer to match a competing platform’s offer. You can get hold of reservation staff via phone or chat.
I tried the chat twice, i.e. I lost the agent once so I had to try a second time. After the first try, I called, but was told the phone agent could not help.
So after wasting 10 minutes on the phone I tried the chat a second time to see what the NH Hotel Group would do about following its Best Price Guarantee (see above).
To do this via the chat, you need to present NH Hotel Group with the competing offer. So I sent the yeego.com policy as a screenshot.
Yeego’s cancellation policy (see above) is actually way better than what NH Hotel Group offers (see below).
3. Building trust: Apply your Price Guarantee correctly
The agent from NH Hotel Group compared the Yeego policy with theirs. Anyone would expect that NH Hotel Group would offer me the room for €80 less 10 percent, as stipulated in the policy, which would add up to €72 including breakfast. Think again!
Below I show the critical part of the chat protocol indicating why NH Hotel Group was ‘unable’ or ‘unwilling’ to follow their Price Guarantee Policy.
As you can see further, Yeego.com offers me a refund in full minus a €15 fee. All I have to do is cancel at least seven days in advance using their website. By contrast, NH Hotel Group only offers me a ten percent refund.
Obviously, Yeego is more generous than NH Hotel Group, even with their refund policy. Which means – according to their rules – NH Hotel Group is not required to honour their price guarantee. That does not make sense, but it is exactly what the reservation agent told me as shown above.
What does this tell us? Read on and find out.
[su_box title=”3 takeaways: How hotels make it EASY for Booking.com, Expedia and HBS.com to succeed” box_color=”#86bac5″ title_color=”#ffffff”]
1. Damaging trust: Make sure your staff does not truly understand your policies
If you offer to price match, and take an additional ten percent off (in my case €72 price for room and breakfast), do it. In other words, don’t tell me that because the other site’s refund policy is better, and yours is misleading, you won’t make it right. You’re basically telling me you don’t want my business, and that’s just ridiculous.
Using a loop hole to avoid honouring your own policy when push comes to shove damages clients’ trust in your brand.
2. Buyer beware: Use your digital means to annoy your clients
“We’ve seen from our customer research that 65 percent of all guests are likely to re-book hotels where they’ve had a great experience, and staff attentiveness ranks as the top driver of great hotel experiences.” – PWC
Having to jump through too many hoops to get an answer from your service agent does not make a great FIRST impression.
Worse is that I will likely tell my colleagues and friends about it. In short, through this blog entry, you and many others now know the NH Hotel Group’s price guarantee is not worth the screen you see it on.
If this does not amount to an example of what negative word-of-mouth marketing can do to PR, what does?
3. Damaging reputation: Adding insult to injury
Making it hard for your client to get their problem resolved does injury to your relationship. It also shows that you still need to learn a lot in order to master digital sales. However, you add insult to injury if you fail to do right by your client.
Two things can happen. First, customers may shy away from booking a room via your own platform. Instead they may prefer using Expedia or Booking.com to make a reservation. Second, for each room sold that way, your net revenue will be reduced by 15 percent or more. This is the additional cost you must bear in the form of a commission paid for each room and night sold through these platforms.
As a business owner, I find this a strange way to improve your company’s ROI (return on investment).[/su_box]
4. Have your say – join the conversation
What is your opinion?
- Do you remember the last time you had a company wriggle out of honouring its own policy?
- How do you ensure that your employees know how to interpret a company policy correctly?
- What bugs you the most when it comes to shopping online?
The author declares that he had no conflict of interest with respect to the content, authorship or publication of this blog entry (i.e. I neither got a freebie from any of the mentioned companies nor are they our clients).
To put the icing on this proverbial cake, maintenance of NH Hotel Group’s website is done during the week.
So, when people want to book on a regular weekday morning, they get nothing. My visit on Tuesday, November 8, 2016, around 08:30 (MET) yielded this:
Because Yeego.com offered a better guarantee (i.e. refund policy), I booked there for €80 including breakfast. I will see on November 23 how attentive the staff is when I stay overnight.
In David A. Aaker’s language about brand equity, this case illustrates that my association and beliefs about the brand changed. I associate it not with keeping its promises as stated in the Price Guarantee. My attitude towards the brand has moved from no opinion to a negative one. Maybe my visit to the Leipzig property will change that.